It is for each household to assess and determine for themselves whether or not they consider they are liable to pay wealth tax. There is no need for a professional valuation to be made.
To some extent, therefore, there is an element of voluntarism in the declaration of tax liability!
However, in the event that the tax authorities decide that you are liable to pay wealth tax, they are entitled to collect arrears of payment over the following 10 years.
The French tax authority does have sight of all property transactions in the country so will be aware of the price you paid for a property.
In 2017, an interesting court case demonstrated very clearly the determination of the tax authorities to take on those who underestimate their assets, which you can read about at Wealth Tax Property Valuation Rejected.
The date for the tax declaration is normally around the end of May or early June each year.
The declaration must be made by in accordance with the timetable for your income tax declaration.
The form is Form 2042-IFI, in which you give the figure of your gross and net assets.
If you are non-resident, and you do not have French income, you declare on Form 2042-IFI-COV.
The previous Form 2725, for those with assets over €2.57m, has been abolished.
You need to list on the form those investments and payments which you consider give you an entitlement to a reduction in your wealth tax liability. There is no need to provide supporting documentation.
As a non-resident in order to make a declaration you need to contact:
- Service des Impôts des Particuliers Non-Résidents,
- TSA 10010, 10 rue du Centre,
- 93465 Noisy-le-Grand
The e-mail address and tele. no. of the office for non-residents is:
- Telephone number (+33) 01 57 33 83 00.
If you are late in making the declaration, then an interest charge of 0.4% per month applies, plus a 10% increase in the level of the tax liability, which can be increased to 40% if you fail to respond to a reminder from the tax office to submit the return.
These same interest rate penalties apply if the tax office consider you have inadvertently underestimated your wealth. The penalty can increase to 80% in the event the authority considers you have been deliberately fraudulent.
That said, there is a tolerance of up to 10% (tolérance du dixième) allowed in the inadvertent under-declaration of assets, when no penalty is applied.
The tax office has up to six years to challenge any declaration.
Next: French Capital Gains Tax
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